A price floor usually results in a _____ misallocation of resources.

Question

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A price floor creates a situation where the price of a good or service is artificially kept above the market equilibrium price. This causes a surplus of the good or service because the quantity supplied exceeds the quantity demanded. This surplus leads to a misallocation of resources because there are goods or services that are not being consumed while resources are being used to produce them.

A Price Floor Usually Results in a _____ Misallocation of Resources